Tag: New Mindset

Summary: As we seek a competitive advantage and to better serve our customers we come across concepts that seem nice, but might be difficult to implement or fit together: Customer Relationship Management (CRM), Knowledge Management, Customer Service. To help us cut through the jargon we can use our customer’s perspective on our product, which has been changing thanks to the web.

The subject of CRM, Knowledge Management, and Customer Service has been knowledge about our customers, we can sum up how they have been generally used:

Tool or function.

Knowledge Management.

Customer Relationship Management.

Customer Service.

Actual use.

Gather and distribute staff knowledge about customers.

Mine data to learn about customers.

Deal with customers after the purchase.

Goal.

Efficiency, sales.

Improve customer loyalty.

Solve post purchase problems, complaints, warranties.

All of these tools and functions are useful, although their actual benefits might not match their grandiose names; CRM for instance has been synonymous with loyalty programs, not actually managing entire relationships; and customer service is a euphemism for solving whatever problem the customer has after the sale.

We should also point out that these projects may imply substantial investments and their return might take some time, depending for instance on our product sales cycle (buying toothpaste is a matter of months while a refrigerator takes decades, so hanging on to that loyal customer might not be easy).

Our own customer’s knowledge about our product helps us see that their experience can be much broader and deeper than what Knowledge Management, CRM and Customer Service cover:

With a simple web search our customer can find not only the best, but how other consumers have fared in the long run, and discover the myriad components that make up not just a product but the entire experience surrounding it: What’s the best quality? Which are the essential components? Which are nice to have but we can do without? What should we avoid?

Our customer can also contribute to other consumer’s quests: whether staff is rude or courteous, warranty responses quick or not, which products have worked out better in the long run, if a price is fair…

The difference between what we know about our customers and what our customers themselves know about our product is crucial.

We could give the tools that help us deal with our customer’s perspective a new name, such as Customer Knowledge Management, but that would miss the point, which is that we need to think and act according to the much bigger customer experience that encompasses all these tools. Marketing has long identified all the parameters that make up our product’s value, but seeing it from our customer’s perspective lets us answer the hard questions:

Is our customer loyal? Can loyalty be bought with bonus points or are we confusing it with something else? Are we selling our customers and ourselves short?

Does our customer appreciate our product’s quality and attributes? Or do we need to keep enticing him with lower prices? Is our in store staff prepared for our customer’s wider questions?

Does our customer appreciate a better experience, such as faster turnaround, efficient service, and how much is he willing to pay for it?

What are the limitations of CRM, Knowledge Management, Customer Service and traditional advertising for the greater customer experience?

We can already draw several lessons:

For the first time we have the means for our customers to tell us directly what they are looking for, what they are and are not finding, as opposed to indirect means like data mining, our staff’s interpretation of what customers want, or biased surveys.

We need to see our customers’ greater experience as an opportunity for growth and innovation, to complement the efficiency and loyalty goals for Knowledge management, CRM and Customer Service. This can help us put these programs in perspective, particularly when we are in need of growth and not just internal process improvement.

We need to use the same medium our customers are employing to expand their experience: the web. This means thinking beyond our own stores or distribution channels, beyond the moment of purchase and more about everything that leads to it and everything that happens after.

To meet our customer’s new expectations in their expanded experience through the web we need to take several actions:

We need to be more proactive to engage more proactive customers. The web is the only mass medium that lets us be a direct counterpart in our customer’s conversation.

We need to give our customers the proper incentives to contribute and make them feel appreciated when they do so. We also need the right tools and incentives for our own staff to use our customer’s contributions.

We need to change our mindset to see our customers as active agents and not just as the recipients of our actions, as information partners and not merely as information sources. This might be the key to everything else and may require it’s own plan to keep it from becoming an empty slogan.

We need to expand our data mining through the web beyond what happens at the store to feed CRM and Knowledge Management systems, while keeping our customers’ privacy concerns in mind and their information safe; the opportunities of the wider customer experience go beyond merely attempting to track our customers on the web.

We also need to take into account the fact that customers might know more about the experience surrounding our product but they are not product or market experts, following them blindly might lead us to Homermobiles.

CRM, Knowledge Management and Customer Service are all useful and necessary, but their traditional uses respond to a more narrow, inward looking view of our customer’s experience, which has been expanding thanks to the web. We can use our customer’s wider experience as a focal point, to understand what each can contribute, as well as how to use the web itself to engage our customers.

The web is all around us, we use it daily as consumers and yet its use by our companies and organizations still leaves much to be desired. To fulfill the web’s promise we need to step back and look at its use by our customers, as opposed to the technology and design behind it, to see how we can improve our participation in it.

Our customer is looking for a set of earphones or headphones; where does this quest take him, what products does he end up with? Could he have done better? Is his path filled with uncertainty and hassle? How much does he enjoy the final product? In the old mindset, all of this is “his problem”; in the new mindset, it is a series of opportunities to compete on a better outcome and improve the experience for our customer at every step; and the web lets us meet our customer at each of these steps.

Our customer ends up with a set of earphones which don’t quite fit his ears, listening to poorly sounding music from his phone; he isn’t sure of having made the best purchase and pretty soon stops listening and leaves the earphones on a shelf, to be forgotten. In the meantime there are earphone tips which would have made them more comfortable, digital players which would have made the most of the music files, music which would have knocked his socks off; and all their vendors are missing a sale. In the old world this would be the end of the story; in the new world he will leave comments at the store’s and the brand’s websites: “Don’t bother, it’s not worth it”; and at a stroke the brand will have lost thousands of potential customers, not just this individual’s future purchases.

The lesson is that the very first step for any web project is to ask ourselves: Where do we want to take our customer? For companies with established brands, the question becomes: just how much are we really fulfilling our brand’s promise? We are talking about the breadth and depth of our customer’s experience with our product.

Following Theodore Levitt’s classic 1960 HBR article “Marketing Myopia”, the earphone brand isn’t in the earphone business, but in the “sheer pleasure from music” business, or in the “make workouts less boring with music” business; the digital camera manufacturers are in the “get that perfect shot while on holidays with the family” business or in the “help me see if this photo hobby is for me” business: the idea is old, but the web makes it all the more possible, and all the more pressing because our customer is closer to that expanded definition of our product.

The second step is to establish a way to generate insights into our customers to answer that basic question. Who has that knowledge? How can we collect it, understand it, use it? This implies a cultural shift because we can only answer these questions from our customer’s perspective instead of seeing him as the source of all our problems.

This cultural shift might be a deeper problem than you think, as we might have lavished on our product’s design, spent years perfecting the engineering behind it, countless resources on our supply chain… Only to have the wretched customer “holding it wrong“.

This second step involves another cultural shift because we cannot ask specific results from whoever is in charge of generating insights: it’s a learning process and we’ll know what to do with the insights only once we have them. Some people don’t have the temperament to work outside of an established framework, some companies aren’t structured to invest in results that aren’t applicable in the shortest of terms, some executives don’t have the time to stop and think, office politics might get in the way… But the insights are still necessary to proceed, and whoever is able to produce them will have a competitive advantage, so we need to find a way; those insights might also be a required ingredient for other projects such as CRM. The solution I suggest is to establish a “Web Lab” which builds a map of our customer’s experience and produces specific web solutions, some of which might be very simple and easy to implement.

The third step once we have those insights and establish a few web solutions, is to understand the resources required to implement them. The good news is we will have already made the biggest and most difficult investment, namely those customer insights. We will also be in a position to establish which resources are the most important, what we can do with what we have, which resources need to be cultivated internally and which need to be outsourced, and specific requirements for external suppliers.

It would help if we followed a web methodology which establishes a specific flow for our projects, from our goals and solutions as defined in a content strategy, to the information architecture, usability and programming requirements; while these may sound daunting to the uninitiated, it is much easier and quicker to implement for the respective specialists with good requirements, and a lot can be done with available and even free or very cheap technology.

As consumers the web is expanding our horizon and our expectations; if we invest in understanding our own customers’ path we can use the web to improve their experience around our product, expand our sales as well as our profit margins, and have a competitive advantage.